ACC proposes ‘across the board’ levy cuts next year

ACC is proposing significant cuts to motor vehicle
levies, including the ACC petrol levy, next year, as well as
further reductions to work and earner levies.

The
corporation is seeking feedback on these and other proposed
changes as part of its annual levy consultation process,
which starts today.

After consultation closes, ACC
will consider all submissions received, then make its
recommendations to the Minister for ACC. The final decision
on levies rests with the Government.

“On average,
we’re proposing a forty per cent cut to motor vehicle
levies, which are paid when relicensing a vehicle and
through the petrol levy paid at the pump,” says ACC Chair
Paula Rebstock.

“We’re also proposing an average
twenty-one per cent cut to work levies, and a five per cent
cut to the earners’ levy in 2015.”

This follows
the significant reductions to work and earner levies which
took effect in April this year.

Ms Rebstock says
“This is a significant package of proposed levy cuts, made
possible by the fact that the Scheme has achieved its goal
of being fully funded.”

Full funding means ACC has
sufficient financial assets to meet the lifetime costs of
all existing claims.

As well as reducing motor
vehicle and petrol levies, ACC is also proposing the
introduction of ‘risk rating’ for cars in 2015.

Risk rating would see the levy paid by car owners
reflect how their vehicle’s design affects injury outcomes
in a crash.

Motor vehicle levies already reflect the
different risk and cost of injury associated with different
classes of vehicle. Risk rating would enable a more
sophisticated classification of risk, based on real life
crash data, within the ‘light passenger’ classes, which
essentially comprise cars.

“Risk rating would mean
owners of safer cars pay lower levies, to reflect the fact
their vehicle is less likely to cause injury if involved in
a crash.

“While owners of the safest cars may
receive the largest levy cut, I’d like to emphasise that
all car owners will pay lower levies under our proposed
changes.”

Ms Rebstock says ACC is not proposing
levy reductions for motorcycles next year. This is because
motorcycle-related injuries continue to generate
disproportionately high costs for the scheme, and motorcycle
levies are already heavily subsidised by owners of other
types of motor vehicle.

Proposed changes to levies
in 2015/16• combined average motor vehicle
levy reduced from $330.68 to $200 (40% reduction)•
petrol levy reduced from 9.9 cents to 5.9 cents per litre
(40% reduction)• average work levy reduced
from $0.95 to $0.75 per $100 of liable earnings (21%
reduction)• earners’ levy reduced from $1.26
to $1.20 per $100 of liable earnings (5% reduction)

Other changes that ACC is proposing for 2015/16
include:• increasing the minimum and maximum
liable earnings limits for work and earners’ levies.

Some figures highlighted in this media release depict
average reductions across entire levy categories, so ACC
encourages Kiwis to check the levy consultation documents,
to find out the individual impact of the proposed
changes.

“Levy consultation is an opportunity for
Kiwis to have their say on the changes ACC is proposing for
the coming year. I encourage everyone to read the
consultation documents, and send us a submission if you want
to share your views with us.”

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